Operations Management Principles-FedEx Analysis
Operations management entails the analysis of managerial processes concerned with oversight of design and re-design of business activities aimed at creating value by producing services and goods with an aim to make profit (Chang, 2006). These activities should be done inline with the consideration of various operations management concepts and principles in mind so as to enhance efficiency. This paper particularly highlights Federal Express (FedEx’s operations management with a view of analyzing its operations and determining the kind of process strategies that the company follows in conducting its freight business.
Federal express was founded in by Frederick, W. Smith in 1973, and it began shipping its products in the same year to various destinations over-night from Memphis in Tennessee. In the present day the corporation handles over 3 million packages that are transported overnight to various destinations. The corporation handles an approximated total of 5 million shipments in a single day all over the world. The company holds more than 50% of the overnight delivery business share of the market (Hoovers, 2011).
The company falls in the freight service category and thus produces no fixed products or specifically tailored services. Their services are less clearly defined, but they do offer an overnight delivery guarantee without clear specification of time and thus their services can be termed as being two-tiered. Common facilities are used for each services and therefore it becomes unnecessary to hold excessive capacity t cater for changes in demand. Therefore, incase of high demand delivery time is lengthened. The services offered by FedEx are highly non-standardized and thus making its operations fall under the job shop process strategy of operations management. Its services have greater variety and they are highly non-standardized therefore, not befitting into the other categories of process strategies (Chang, 2006). Its low specialized operations are carried using the same resources and workforce.
The typical characteristics which make FedEx’s activities to fall under this category of process strategy include the fact that it makes use of general purpose equipment top handle the same transport functions in various centers (Galloway,1993). The corporation has little vertical integration, informal relationships with its clients, and an organization that is structured departmentally, thus making it typically a job shop process strategic corporation (Galloway, 1993). The departmental form of its organization can be seen in its various departments of freight business that deal with different types of items. Therefore, the organization is departmentalized in order to handle different kinds of shipments. Examples of its departments include FedEx Smart post, FedEx ground, FedEx custom critical, FedEx Kinko’s, FedEx National LTL and FedEx Tec Connect-just to mention but a few. These departments are customized to meet the various demands in freight business, because many at times delivered packages vary in terms of value, sensitivity, destination distance and urgency of delivery.
The corporation’s administrative operations take place in its headquarters in Memphis, TennesseeU.S.A. This provides a central location from which its core functions are carried out. There are actually minimal benefits of locating the headquarters in Memphis, but perhaps the decision is just a matter of legacy-because that is where the corporation was born. However, if I were to choose its new headquarters, I would make a proposition for New York, because of its centrality to most business and national operations such as NYSE.
References
Chang, F. J. (2006),. Business process management systems: strategy and implementation .Auerbach Publications
Hoovers (2011),. FedEx Corporation, retrieved on 2nd May 2011 from http://www.hoovers.com/company/FedEx_Corporation/rfhhti-1.html
Galloway, L. R. (1993),. Principles of operations management, Routledge Publishers
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